Pig prices soar as China chases stocks due to African Swine Fever impact
Pig prices have rocketed over the last six weeks as the impact of the African Swine Fever (ASF) outbreak in China has transformed global markets.
Irish factory prices have surged by 35-40c/kg since April, with processors now paying to a top of €1.82c/kg to secure supplies.
The lift in quotes equates to a price hike of around €35/pig on an 85kg carcass. This has transformed the fortunes of pig producers, who have gone from losing €10/pig to making €25/pig in just two months.
And the outlook from the industry is that prices will remain strong for up to 18 months.
China has been forced to cull 7m breeding sows as a result of the ASF outbreak. This represents almost a quarter of its breeding herd - the world's largest.
The cull means that China's pork production this year is expected to fall by 25-30pc from the 54m tonnes produced in 2018. This represents a drop of around 16m tonnes.
The shortfall in Chinese domestic production will be offset by imports of pork and other meat such as beef and poultry.
However, the volumes required have pushed global pork prices to record levels.
IFA pig's chairman, Tom Hogan, said the upturn in pig prices comes after 18 months of disastrous prices where returns were below the cost of production.
"Reports to the IFA indicate that the average price received this week is €1.78c/kg, with a high price of €1.82c/kg reported. By contrast, the price as recently as April was at €1.40/kg," Mr Hogan said.
"It will take a prolonged improvement to recoup the heavy losses sustained since early 2018," Mr Hogan said.
Bord Bia's, Peter Duggan, said massive Chinese imports of pork are being forecast for this year.
Imports of pork into China had previously hit a high of 1.6m tonnes in 2016, but the indications are that the country will purchase close to 3m tonnes this year.
With China struggling to contain and control the ASF outbreak, it is expected that the country's import requirements for pork could extend till 2021.
"In the short-term to medium-term I would be broadly optimistic that the pig trade will remain solid given the current dynamics in the market," Mr Duggan said.
Bord Bia figures show that in the first quarter of this year Irish pigmeat exports to China were up 20pc compared to the same period last year at almost 18,000 tonnes.
The value of the business was also stronger, increasing from €20.5m in 2018 to €25.27m this year.
This increase has supported an overall buoyant performance in pigmeat exports during the first quarter of the year - up 4pc in value terms to €202.8m.
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